I saw a warning on facebook this morning from the folks at Pithy Little Wine Co in San Luis Obispo; there is a petition being circulated in California, trying to qualify an initiative for the ballot of the November election in California, that would raise taxes on a bottle of wine about $5.

Link to SF Business Times article

The excise tax on a regular size 750 ml bottle of wine would increase 12,775%, from 4 cents to $5.11 if the Alcohol-Related Harm and Damage Services Act of 2010 were enacted.

Wine isn’t the only beverage being targeted, a six pack of beer will increase about $6 and and a bottles of scotch/gin/tequila/etc. would jump about $17.

In most of California, just about everyone knows someone who makes a living because of wine. Growing the grapes, making the wine, driving it to the store, creating a marketing or advertising campaign to sell it, selling it, helping you to your car with your purchase. In a time of recession, with many people unemployed and few worthwhile positions being offered, this initiative is a job crusher.

Do not be fooled into thinking that this will provide a strong and healthy revenue stream for the state, or that “sinners” should pay for the ills of society. California Secretary of State Debra Bowen’s office, tasked with analysis of the fiscal effects of ballot initiatives, forecasts a loss of hundreds of millions of dollars in California state tax revenues from alcohol if this initiative were to be put on the ballot, and then pass successfully, as consumers cut back on their purchases.

Price check on aisle one:

Fred Franzia’s Two Buck Chuck will sell for over $7.

Folie a Deux’ Menage a Trois is $7 on sale, will be $12.

Toad Hollow’s Chardonnay is $13, will be $18.

Keller Estates’ La Cruz Pinot Noir is $42, will be $47.

Parducci’s True Grit Petite Sirah is $30, will be $35.

V. Sattui’s Vittorio Sauvignon Blanc is $22, will be $27.

The tax increase, on the six wines listed above, comes to 26%. That 26% average increase in price will keep consumers from buying the wine, which will cause more people in the wine industry to lose jobs, and cause the state to lose tax revenue it previously received.

Note: smart shoppers often buy more to save; if you were able to buy the six bottles above together (you can’t, but let’s pretend) to save 10%, the punishing additional tax increase of this proposed ballot measure remains fully in effect, and your additional tax burden increases to 29%.

Wineries are already paying tons of taxes to bring you a healthful beverage that goes great with food, friends, and family; wineries pay income, payroll, and excise taxes, and increasing taxes as the percentage of alcohol inside the bottle increases.

For the non wine drinkers among you; if you like the good occasional margarita at home, a $20 bottle of 1800 tequila will cost $37. Most hootch sold is cheaper, so the price increase will be more than the 86% here.

A six pack of Budweiser beer, nothing fancy, runs about $7 right now, but will cost $13 if this initiative makes the ballot, then passes. That 85% increase will run to 100% or more, as most Bud drinkers buy larger quantity to save money – but the tax increase won’t shrink at all.

How many people will spend over $2 per Bud…at home? Not many, and the tax revenues shrink further, and more people lose their jobs.

If you live in California, when you go to the supermarket and you see people with petitions to qualify initiative measures for the ballot, check to see if this dangerous proposal is among those the folks outside your store are asking you to sign.

Step one: do not sign the petition.

Step two: engage the signature collector in a vigorous, loud, debate. Ask why they are even collecting signatures for a measure that would raise taxes on a beverage where taxes are already collected. Ask how they can justify a business crippling 12,775% tax increase on any business during a recession.  Ask if they are aware of the states impartial fiscal analysis forecasting a loss of tax revenue to the state in the hundreds of millions. Ask them if the $1 per signature they are being paid is worth the many jobs that will be lost if this initiative qualifies for the ballot and passes.

Your actions will prevent others from signing this petition as well. The initiative will not appear on the ballot if proponents fail to collect around 434,000 signatures by August 23, so any legal action that makes signature collection easy is recommended.

If wineries are forced to pay a 12,775% increase in excise tax, from 4 cents to $5.11, you will find the tax passed on to you and you will end up paying from around 26% to over 100% more for many items you now enjoy.

I urge you to send a note to the initiative’s authors Josie and Kent M Whitney at kjkwhitney@yahoo.com as well.

Here’s the text of the proposed initiative:

IMPOSES ADDITIONAL TAX ON ALCOHOLIC BEVERAGES. INITIATIVE STATUTE. Imposes an additional excise tax on alcoholic beverages, increasing the excise tax on each six-pack of beer from 11¢ to $6.08, on each 750 ml bottle of wine from 4¢ to $5.11, and on each 750 ml bottle of distilled spirits from 65¢ to $17.57. Requires additional excise tax revenues to be deposited into a special fund appropriated to the Department of Alcohol and Drug Programs to finance programs to address alcohol-related harms as specified. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local government: Additional state revenues of between $7 billion and $9 billion annually from an increase in state excise taxes on alcoholic beverages, with the proceeds going to support alcohol-related programs and services. A decrease in state and local revenues from existing excise and sales taxes on alcoholic beverages of several hundred million dollars annually due to a likely decline in consumption of alcoholic beverages. (10-0005.)

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